IP's Pineville Mill to close in mid-December

Oct. 23, 2009

The International Paper mill in Pineville will close permanently in mid-December, throwing more than 200 people out of their jobs and affecting almost 2,000 more people who work indirectly for the plant. / Melinda Martinez/mmartinez@thetowntalk.com

PINEVILLE -- More than 2,100 people are expected to be directly or indirectly affected by the closure of International Paper's Pineville Mill, company officials said Thursday.

The permanent closure of the Pineville Mill, effective in mid-December, was announced to employees Thursday morning, plant manager Pete Thompson said.

The mill employs about 230 workers, and the closure also will impact about 1,900 people involved in the wood-procurement process -- primarily loggers.

The Pineville Mill closure was part of a broader announcement made by the company of the closure of three mills and a machine previously idled. About 1,600 employees will be directly affected nationwide by the closures, and it will reduce the company's North American paper and board capacity by 2.1 million tons.

"As you can imagine, this is pretty difficult news to hear at this day and time," Thompson said late Thursday morning. "We have people that are obviously shocked, and we have some that knew that at some point this day would come but just hoped it wouldn't come anytime soon. It has been a difficult day, but we have very good employees at this facility."

Gov. Bobby Jindal visited Pineville on Thursday afternoon to talk about the state's commitment to helping those affected by the mill closure.

"I know there are over 200 families who got this news today and are wondering about how they are going to pay their bills and what they are going to do once this facility shuts down," Jindal said. "My commitment to them is, we are going to do every thing we can to get every one of our families back to work right here in Louisiana."

The company is beginning to work with union officials on severance benefit packages for hourly employees, and those who are salaried will fall under International Paper's salary severance plan. Thompson stressed that they are working with the state's Rapid Response Team and area employee assistance providers to help employees and their families cope with the announcement and what it means to them.

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The Pineville Mill opened in 1968 as part of Bodcaw Company and was purchased by IP in 1979. It produces 400,000 tons of linerboard per year.

The plant has faced several instances of production downtime to try to deal with less demand for its product.

The company announced in July 2005 that closing Pineville's Mill would be considered as part of a nationwide restructuring that would direct resources toward uncoated paper and industrial and consumer packaging.

In 2007, IP decided to keep the Pineville Mill open after a two-year review of the viability of the plant.

"Back in 2005, the challenge was a lot different than it is today," Thompson said. "They were challenged to improve their cost position within our division, and they did that. Folks stepped up and made the changes, and it was unbelievable what they were able to accomplish. And as a result of that, they were able to run a few more years. But now we face a challenge that is outside of their control."

Jindal cited a "downturn in demand, spurred by the declining national and global economy," as the reason for the closure.

When he spoke with IP CEO John Faraci on Thursday morning, Jindal said, Faraci was very complimentary of the workers and the local region. He made it very clear that "the workers have done a tremendous job" as have the state and the community, the governor said.

"There was nothing more they were expecting from the workers or the community," he said. "There was nothing they could have done differently to cause them to change their decision."

The Pineville Mill is part of a 14-mill containerboard division, and the capacity of the division is 11.4 million tons. Projected sales for 2009, though, are 9 million tons, Thompson said, leaving a 2.4 million-ton gap. That gap is the equivalent of about five Pineville mills.

"In the short term we have taken downtime, even this year, to manage our production with customer demand," Thompson said. "That's a short-term strategy, but long term the economy is going to shrink when we recover from this recession we are in, and we don't see demand returning to pre-recession levels anytime soon. And as a result, we have to take a capacity reduction within our system. And it is difficult, but Pineville and Albany, Ore., were the two mills that are going to take our capacity out at.

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"One of the things we've been sharing with the employees is that they've done everything within their power, they couldn't do anything better or differently to change the announcement that was made today."

Pineville Mayor Clarence Fields said the closure announcement was unexpected and that he was shocked to hear the news. He said all indications were that the plant was doing well and was making strides.

"My first thoughts are for the employees and their families and the pressures this puts on them and the community," Fields said. "Our first objective is to give them every opportunity we can to help."

The city has done everything it could to help support the mill, Fields said.

"You are obviously going to be frustrated because of the impact the plant has on the community," he said of the closure. "We have done a lot of work to help the plant. But the bottom line is that three other plants in America are being closed as well. We don't control the market. We've done everything we could have possibly done to help. And the plant has been very good to work with."

Thompson echoed that, saying mill officials are grateful for all the support they've received.

"The employees and the support we've received from the local community -- Mayor Fields of Pineville, Mayor (Jacques) Roy of Alexandria, Elton Pody and the Chamber of Commerce -- has been fantastic. And in the end, the people at the mill and in the community have done everything they can to support this facility. But that alone won't change the outcome of today's announcement."

Pineville City Councilman Kevin Dorn has worked for IP nearly 17 years. He spoke about the closure in his capacity as a councilman, not as an IP employee.

"It's always an initial hardship on the communities when you lose a manufacturing facility in a small area that was one of the leaders of employment in the area," he said. "I believe it is going to take some adjustment to compensate for the loss to the community."

Dorn said his focus right now is to do all that he can to support the facility and his fellow employees. He described the workers as a "close-knit group."

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"Morale of the employees quite naturally has dropped," he said. "It is a very emotional time. But the employees here are committed to excellence, and with that commitment we'll work as hard as we possibly can, to make this as comfortable as possible. We feel that our leadership at this facility is great. We are just trying to make the best out of a bad situation."

The announcement of the closure of the Pineville Mill comes 11 months after the announcement of the closing of IP's Bastrop mill, which meant a loss of 550 jobs.

"It has not even been a year since we received the troubling news that International Paper would close its mill in Bastrop," said U.S. Sen. Mary Landrieu, D-New Orleans.

"The loss of another 230 jobs is of great concern," she said. "It will put already struggling families out of work and weaken the local economy. During these difficult economic times, it is important to tap federal programs to assist and transition workers who will be affected by the Pineville plant closure. I am also committed to redoubling our efforts here in the Senate to support job-creating projects and encourage investors to bring new businesses to Central Louisiana."

U.S. Rep. Rodney Alexander, R-Quitman, pledged his support to those affected.

"My staff and I will reach out to the employees of this plant and do everything we possibly can to ensure that their basic needs are met," Alexander said.

"For decades, these hard workers have given so much to IP and to the region. I am disappointed and deeply saddened by this devastating news. My thoughts and prayers go out to these employees and their families."